Bad Faith in Disability Insurance Claims

It is financially and emotionally difficult to be disabled.  People with disabilities count on insurance companies to provide them with fair settlements to cover the medical expenses, rehabilitation costs, and lost wages associated with being disabled.  When your disability insurance does not provide you with timely benefits then the insurance company may be acting in bad faith.

Some common examples of bad faith include:

• Requiring excessive, unnecessary, or duplicative information;
• Delaying a claim for an unreasonable amount of time; and
• Denying a claim for valid benefits.

Filing a Complaint

If your insurance company has acted in bad faith that it will likely be necessary to file a complaint in order to recover the insurance benefits that are rightfully yours.  There are several ways in which to file a complaint including:

With an insurance company:  You will need to provide the information that explains why you qualify for disability benefits and why you believe that your claim was denied in bad faith;

With the State:  Each state has an insurance commissioner.  The insurance commissioner’s office hears complaints concerning insurance bad faith; and

With the Court:  This will initiate a lawsuit against the insurance company alleging that you were denied benefits in bad faith and that you are entitled to damages.

Recovering for Bad Faith Disability

Your recovery for bad faith disability depends on when you win your appeal.  At all stages, you should be able to collect the benefits that are owed to you pursuant to your policy.  You should also be able to recover retroactive benefits from the date on which the insurance company should have approved your claim.

If you win a complaint that you filed with the state or a court case against the insurer then you may also be able to recover attorney’s fees and other out of pocket expenses related to your claim.  The insurer may be required to pay a fine for its bad faith actions in dealing with your case.

A lawyer can represent you in a claim against an insurance company, a claim filed with the state insurance commissioner, or a claim filed in state court.  Your future right to collect disability insurance may depend on your legal representation.  You can be confident that the insurance company will be well represented by counsel who will argue that the insurance company did not act in bad faith.  Therefore, it is important to hire a lawyer if you believe that your disability claim was denied in bad faith.